Herencia is thinking big for rescued Metro Bank Group

Metropolitan Bank Group Inc., whose chairman is former Banco Popular North America President Roberto Herencia, is a possible bidder.

Roberto Herencia is back in Chicago's banking game.

And the former CEO of Rosemont-based Banco Popular North America likes the chances of Metropolitan Bank Group Inc., the troubled $2.4 billion-asset lender he and a group of wealthy Mexican investors rescued on June 28 with $207 million of fresh capital, to thrive in a market most observers believe has too many banks.

In his first interview since closing a deal that many in the industry thought wouldn't happen, Mr. Herencia said his group has big ambitions.

“The management team and the investors are not here to run a $2.5 billion bank,” he said, adding that his team is capable of running a bank between $10 billion and $20 billion in assets.

Mr. Herencia, 53, is serving as chairman of Metropolitan, and his longtime associate Alberto Paracchini is president and CEO.

First things first, though: Metropolitan's North Community Bank remains under consent order with regulators and won't be able to acquire other banks until those restrictions are lifted.

In the short term, the recapitalization “immediately allows us to tell customers that we're back,” he said. “We're open for business.”

DIGGING OUT

Metropolitan, Chicago's second\-largest privately held bank, has effectively been digging out from under a pile of sour commercial real estate loans for the past four years. Its former owners, Peter and Paula Fasseas, don't have a role on the board or in management. They do own about 1 percent of the shares after the infusion.

The bank's main strength, Mr. Herencia said, is a 92-branch network, located mainly in the city, housing a solid franchise of core deposits. That was the main appeal of the investment for Mr. Herencia's group of investors, he said.

“In many respects, the branches of the future are here,” he said, alluding to the smaller, urban locations that many giant banks are adding, as cities attract younger and wealthier inhabitants.

Over time the bank, which was heavily concentrated in commercial real estate loans, will need to diversify its loan portfolio, he said. Small-business lending will be a major focus.

In the short term, Metropolitan will outsource the workout of the large pile of existing non-performing loans in order to free bankers to begin calling on new customers again.

But in the long run, Metropolitan will participate in what Mr. Herencia expects will be an era of active deal-making among banks. Once the bank grows larger, a public offering would be likely, he said.

And why did his investors choose to invest in Chicago, which analysts say is behind many other U.S. markets in terms of the recovery of its banks from the Great Recession?

Despite holding the chairman title, Mr. Herencia envisions playing a very active role at Metropolitan, advising what he described as “an experienced but young management team.”

And Mr. Herencia — who last ran a bank in Chicago three years ago, trying in vain to save Melrose Park-based Midwest Banc Holdings Inc. — clearly relishes being a player again in a Chicago market in which he's spent the majority of his career.

“The next three to five years will see lots of (bank) deals, and I'll enjoy that part quite a bit when it arrives,” he said.